Bill would delay higher rates for flood insurance

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WASHINGTON — A bipartisan group of lawmakers on Tuesday unveiled legislation that would delay for about four years several changes in the government’s flood insurance program that threaten to sock thousands of people with unaffordable premium hikes.

The government is beginning to implement an overhaul of the much-criticized program. That overhaul, passed last year with sweeping support, has caused a panic in places like Staten Island, N.Y., the New Jersey coast, and flood-prone areas of Louisiana, Mississippi, and Florida.

Some of the most ardent supporters of delaying the premium increases are conservative Republicans from Southern states, where new rules have sent some home values plummeting because of uncertainty over insurance rates and because subsidized rates can’t be passed along to buyers. New flood maps threaten to saddle some homeowners who are paying a few hundred dollars a year now with annual premiums of more than $20,000.

‘‘This is a real threat to the economic well-being of many communities,’’ said Senator Mary Landrieu, Democrat of Louisiana. ‘‘There is no state that is exempt from this challenge.’’

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Last year’s legislation brings premium increases to 1.1 million homeowners who have received subsidized coverage and could hit even more homeowners whose homes met older building standards or were deemed at lower risk under previous flood maps. Under the old rules, they could retain their old rates, but they will soon lose those ‘‘grandfathered’’ rates.

A bill unveiled Tuesday would delay the new rates for people purchasing homes from someone who currently has a subsidized policy or people who face higher rates when flood maps are updated. People with second homes or whose property has repeatedly been flooded would still have to pay the higher rates, which are scheduled to rise 25 percent a year until their premiums reflect the true risks.

Steve Ellis of Taxpayers for Common Sense, a watchdog group, said the proposed changes would ‘‘gut the heart’’ of last year’s bill because the delays would carry past its July 2017 expiration date. ‘‘It’s a tidy way of basically saying, ‘We don’t ever want to do any of those reforms,’ ’’ Ellis said.

It’s unclear whether the drive to delay implementation will succeed. Backers won a bipartisan 281-to-146 House vote earlier this year on an amendment to a spending bill that would postpone some of the premium increases. But conservative groups are against the idea.

The flood insurance program has long offered below-cost rates for homeowners in flood zones and has racked up about $25 billion in red ink since its creation in 1968. It has been criticized for repeatedly paying off homeowners whose houses get flooded every few years. The flood insurance program collects $3.5 billion in premiums each year, but the Federal Emergency Management Agency says $1.5 billion more is required to put it on a sound financial footing.

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